This document discusses the personal computer value chain and opportunities for local assembly in Ghana. It notes that PCs are highly modular products assembled from components like motherboards and hard drives. Locating assembly close to component manufacturers helps reduce costs through better logistics. While large firms outsource assembly abroad for lower costs, there is potential for local "screw driver" assemblers to serve neighborhood markets. The document recommends facilitating these local assemblers and exploring lower-cost alternatives like application-specific laptops to expand affordable computing.
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The purpose of this report is to find out how Dell Inc. is coping up with the e-business strategies how they are marketing it and what theories they are using in practices. In this report we are simply dealing with the impact of e-commerce and the payment methods what are their marketing strategy and how they are offering technical support to the consumer and the suppliers
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2
Apple Incorporated
Cupertino, California
November 14, 2019
Alberto Lopez, Innovation Manager
Apple Innovation and Creative Committee
Apple Incorporated
Cupertino, California
Dear Manager Lopez,
Driven by the fast-growing pace of the internet and availability of tools, as an IT aspiring creator, my biggest concern is in the mainstreaming of protection and security in computerized systems as hardware.
There is an increasing concern in the inadequacies that are present in software applications and vulnerabilities that are easily exploited by hackers and fraudsters on the internet. The root of the problem is no more extended software development but the capability of computers. I am assured that the company and its creative team have found many take consumer concerns to heart in the development of the next best creation. This is especially true in line with a growing concern of modern slave trafficking, black market trading, and significant data protection. Continuity in relying on only the software protection increases the chance of vulnerability creation in the systems in terms of operational cost, and so people will always go for free downloads.
Given this, I am submitting an idea for the development of a new computer for apple with integrated protection hardware as an effort to reduce vulnerability gateways in computers.
Sincerely,
Fernando Fuentes
Technical designer, Apple Incorporated
A Proposal
For
A New Computer for Apple
(2019-2020)
Prepared for
Apple Innovation and Creative Committee
Apple Incorporated
Cupertino, California
By
Fernando Fuentes
Technical designer of Apple Incorporated
November 14, 2019
Table of Contents
Informative Abstract 4
Introduction 5
Overview 5
Objective 5
Background 5
Need 5
Benefits 5
Data Sources 5
Scope 5
Proposed Plan 6
Objective/Method 6
Cost and Budget 6
Projected Costs 6
Conclusion 8
Informative Abstract
Working in the IT field provides insight into the development needs and the exposure of the public to vulnerabilities of a cyber-attack. In the same way that this problem is recognized, consumers’ disgruntlement comes with the cost of operation that is incurred after initial investments in purchasing a laptop. Therefore, there is a need for more concentration in hardware efficiency improvement and increase mainstreaming of security and protection in the production of a new type of machine for a more preventive approach.
Introduction
Overview
Apple has been among the top companies in today’s PC market who have concentrated on the miniaturization of systems. This means that there has been an increasing lack of concentration based on hardware with more focus on maintaining high quality in the existing visual system. While this strategy is successful in selling luxury and loyalty, the company is quickly losing its customers due to the increase in the perception that “Apple does not allow any other software that is not bought.” This has led to a rise in the cust ...
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1. A brief insight into the Personal Computer Value Chain and its relevance to local assembling.
My study is not to decide in favor of buying computers from abroad or in favor of buying locally
assembled computers but to determine how best we can bring costs down by using the benefit of both.
The Personal Computer or PC is the most significant object of today’s era of digital technology. It’s
population has surpassed the 1 billion mark in 2008 and is one device which has truly harnessed the
power of internet as we perceive it.
The debate between global and local assemblers is derived from the modular design of the PC. The
physical components of the greatest value and electronic intelligence are the ‘semi-conductors’ and the
‘hard disks’. Although the earlier bulky monitor is not part of this but the new flat panel monitors may
form part of this high risk, high value component as well. This family of high value components
experience RAPID IMPROVEMENTS while the value of their earlier generations decrease considerably
almost at the rate of 1% a week. Outside of the electronic sector, it may be only ‘fashion forward’
clothing that experiences a similar rate of value erosion.
For PC assemblers, mastering this pace of change is ‘key to success’ and even more than that ‘their
survival’. Generally all PC assemblers try to bring in heavy items such as bulky cases, power supplies,
etc. by ocean freight and try to get the high value items, mother boards, RAM, hard drives which occupy
only 10% of the weight of final product, by air as and when required. Excess inventory or transit time,
delays in the arrival of expensive components, or any finished and semi finished product containing
these expensive components, anywhere in the value chain, results in VALUE LOSS.
A PC is like a hot potato, any body holding it and allows it to become cold experience ‘VALUE LOSS’,
while those holding it for less than the average time experience ‘VALUE PRESERVATION’ , which counts
as profit. Thus LOGISTICS CAPABILITIES are a central competency for a successful PC industry and
whether we have achieved that in our region needs to be seen.
Out of any technology products ever invented, the Personal Computer as mentioned earlier is the
ULTIMATE MODULAR product, containing about 8 to 10 different modules including keyboards, mice,
monitor, etc. This facilitates the disintegration of value chain into separate firms manufacturing those
components and assemblers thrive in the close vicinity of such firms for easy access and logistics
challenge to collect all components under one roof. All major PC firms such as HP, IBM, ACER, except
DELL, actually assemble only a fraction of their PCs and majority are outsourced to ‘contract
assemblers’ located in the far east just next to their ancillary industry. More fundamentally, the
assembly process adds little value and the process is so routinized that proprietors of small shop and
even individuals at home can undertake it. In the light of more functions being placed on a single circuit
board, the motherboard A PC assembler especially of today in many ways has become more of a
‘logistics co-ordinator’ rather than a true manufacturer.
Moreover this disintegration of value chain among separate component manufacturers with lot of them
manufacturing motherboards, hard drives, etc. has created a tough competition and hardly any
significant profit margins for any of them. This may at times put a challenge on quality for some of those
2. lesser priced lesser known component manufacturers who are tempted to do business with lesser
known assemblers operating out of their ecosystems, there by creating a big challenge for assemblers,
out of the eco system of component manufacturers to source the right quality of products for the end-
users of their area. Additionally when smaller assemblers approach the same sources where big boys HP
& DELL buy, they get bullied by higher prices to maintain similar quality levels while still reserving their
top cream of quality products for big boys alone.
The only firms to consistently make profit in the PC value chain are INTEL & MICROSOFT because they
have been able to prevent entry of their competitors, although both firms are aware that lower PC
prices will encourage more sales for them, hence they compete with each other in form of : Microsoft
tends to encourage other CPU manufacturers like AMD for bring lower cost CPUs in the market and Intel
encourages other Operating Systems such as Linux . The final aim of both Microsoft & Intel is to bring
cost reduction but it should happen with the other vendor of the value chain and not themselves. With
all these big boys fighting themselves, the benefit gets derived by the END USERS who is able to take
advantage of continuous price reductions.
Two decades back when IPMC started its local assembly operations it faced the challenges of
- Weak distribution links
- Higher financing costs
- Lack of skill set and the quality of skill set
- Failure rate higher than what is acceptable to corporates
- High cost of spares during warranty period.
- Lower turnovers, hence stress on inventory becoming outdated over a period of time.
AND today the
- latest threat anyone faces is the inflow of second hand computers which has become the
biggest competition for locally assembled PCs.
Due to the geographical advantage assemblers or contract assemblers of the far east enjoy for sitting
next to its ancillary industry, even countries like India who are not very far from Taiwan China has not
been able to compete in this sector. India rather chose to concentrate on other areas such as software
development and software services. And this is the model what most countries world-wide are
adopting. Since it is difficult to have an ancillary industry of computers in any other part of the world
except far east, some countries have adopted and are concentrating on areas which bring value add to
the IT industry such as local software development, local software services. Rather than thinking about
reducing the PC or CPE price which is already happening automatically on the global level, we can
concentrate on increasing income levels of our populace by making our country as the favored Business
Processing Outsourcing destination. In Ghana GASSCOM is currently endeavoring to do the same.
However there is a huge market where local assemblers can contribute significantly and for that let us
look at another phenomenon experienced in the US which can be replicated elsewhere. USA has the
largest consumption of PCs and there are basically two types of Assemblers there, the very large ones
3. HP, DELL, etc. who supply to most corporate and business houses due to reliability of their product and
a well organized channel for delivery and support. Secondly the US market has the largest number of
next door assemblers who provide personalized configuration, personalized support to their
neighborhoods. Given the ease of assembly of this product and as Michael Dell proved by beginning
such an operation from his University Dormitory, such ‘screw driver’ guys enjoy a 25% share in the US
market. Ghana although a much smaller market as compared to US but has a very high potential for a
fast growth, especially the $1bn oil revenues coming to its citizenry will increase their purchasing power,
hence we should facilitate to grow these next door assemblers in large numbers. For this we should
remove impediments by ensuring easy availability of PC components and creating a strong distribution
channel for the same. Availability of Microsoft software at reduced prices, availability of latest
intel/AMD CPUs at reasonable prices, etc. needs to be taken up with Government’s assistance.
We should also look at alternative technologies of bringing affordable computing to masses by
considering products such as the ones from NComputing which allow multiple users to share the
immense and unutilized power of today’s PC. When looking at laptop for each house hold or each child,
we can have a look at the new up coming lesser priced application centric laptops or devices which
come pre-loaded with specific applications such as student course materials (there by cutting down
costs of expensive software on one hand and lower CPU power on the other). These application centric
laptops also allow restricted controlled access to internet for student research work. One company
based out of Mumbai India, DSK technologies has been praised in the global press for bringing out a
similar product and we need to encourage growth of such companies in our region here.
How to bring down the cost of the highest value component of a PC, which is the CPU, the operating
system, and other software applications, should be in our plan for bringing low cost PCs and laptops to
the masses. Thank you.